UK Onion Conference

16 November 2011


Chile onion production

During an unseasonably warm November in the United Kingdom, I attended my fourth UK Onion and Carrot Conference in Peterborough. This biannual event attracts participants from all over the world; with a strong presence from England and The Netherlands. Six other New Zealanders also attended; growers Bharat Bhana, Dacey Balle and Kevin Wilcox (who presented to the conference), were joined by exporters Mike Blake and Mike Ivamy while Michael Ahern represented Onions New Zealand. By my calculations traders accounting for over half of the Dutch onion volume were also in attendance.

Ed Garner of Kantar WorldPanel, reported that the two fastest retail growth areas in the UK are coming from resurgent discounters and Waitrose (who are a high end supermarket chain). Ed said that "one feature of the produce and the grocery market as a whole is the high and growing level of promotions - 30% of produce is bought on promotion as retailers try to cap inflationary pressures and ‘invite' suppliers to help them do so." Ed encourages growers to "know what your value proposition is to retailers". The customer wants to know about the quality and provenance of the food they are purchasing. The growth in Waitrose sales is proof, that price (while a main driver) is not the only effective tool in marketing produce.

Andy Richardson of the Allium & Brassica Centre spoke of the consequences of the European Union pesticide regulation. Growers face a limited pesticide arsenal to combat pests and diseases. Andy did highlight some new developments on the horizon to replace those that have been removed from the market. Andy discussed recent research into crop elicitors for effective bacterial control in onions. The elicitors prompt the plants own resistance mechanism to provide protection. In herbicides the new advanced micro-encapsulation formulation of pendimethalin, STOMP AQUA is enabling more effective rates to be applied with improved crop safety.

Pablo Ramierz from Chile gave an overview of onion growing in Chile. Pablo told delegates that the area had increased by over 2,000 hectares since 2007, to meet the extra demand from export markets. Pablo explained that "the cost of labour is having a strong impact on their costs". The majority of planting and harvesting operations are carried out by manual labour. Pablo said that the "United Kingdom received 20% of the Chilean export onion crop in 2011". Despite increasing production costs, the Cost and Freight (CNF) cost per bag in Pablo's company was US$10.67 landed in the UK.  Despite a relative short 30-35 day journey o the UK there is pressure on the supply of shipping containers as "there is competition from fruit crops for refrigerated containers and it can be difficult to get containers" he said.

Brothers, John & Bill Rix of Stourgarden gave the most entertaining speech of the conference, a performance that was much akin to the Two Ronnies. They did not pull any punches in their speech, especially when discussing the effects of Dutch onions and the power of retailers. Packing 46,000 tonnes of onions per annum Stourgarden are leaders in the UK onion business. The UK industry through storage and crop management innovations is aiming to be self-sufficient. Currently the UK imports 35% of its requirements. In recent times their own storage ability has increased from 260 days to 320 days, thus "reducing the window for New Zealand onions from eight to four weeks" they said.  Compliance costs have escalated, but are a necessary part of the growing business today. They pleaded to align the many assurance systems so that the extra time and cost involved does not get out of hand. Already their firm is spending over ninety thousand pounds on compliance costs. This year's onion crop was a record for them, and the prices are being negatively affected.

Leading market analyst Dr Hans-Christoph Behr of AMI Germany, painted a very gloomy picture for onion returns this season. Hans-Christoph reluctantly informed the audience that "the European Union had produced 18% more onions than last year, which even exceeds the record crop in 2004/05".  With 1.47 million tonnes of onions in The Netherlands, he sees that "it will be very difficult for the entire crop to be sold this year." There is a small ray of light for New Zealand growers, in that "German supermarkets are in no hurry to change to domestic onions in July" he said.

Robert Oldershaw Jnr, the chairman of British Onions closed the conference highlighting that many UK growers had initially feared for very low onion crop yields following a very dry spring and early summer. However; heavy late summer rains has brought bumper yields and generally very good quality. Robert highlighted that with these increased yields came the opportunity for the UK to become more self-sufficient in onions, he commented "that since 2007 imports from the southern hemisphere had been decreasing due to advances in storage techniques and earlier maturing varieties being used." British onions are attempting to shift the perception among wholesalers of British onions that the imported Dutch onions are not superior to those that are grown in the UK.